In a statement following the end of a two-day policy meeting, the Fed said inflation had "moved close" to its target and that "on a 12-month basis is expected to run near the Committee's symmetric 2 percent objective over the medium term".

However, the catch is the central bank may have signalled its willingness to allow inflation to exceed its 2 per cent goal somewhat by adding a reference to the "symmetric" nature of its target.

Gold rose, then fell into the red in after hours trading and oil edged higher and the Aussie dollar traded at just over 75 USA cents.

The euro gained 0.1 per cent to US$1.1968.

The Fed's preferred Personal Consumption Expenditures price index hit the central bank's two-percent target in March for the first time in almost a year, while "core" PCE inflation, which excludes volatile food and energy prices, was 1.9 percent.

Copper climbed 0.1 per cent to US$3.07 a pound.

"The market will have to get used to the fact that in order to prevent an economic overheating interest rates in the US will continue to rise", they said, predicting that rate differentials between countries would have an increased bearing on currencies and could cement euro/dollar at around $1.20.

"The market has priced the Fed for this year", David Riley, chief investment strategist at BlueBay Asset Management, said in interview with Bloomberg's Anna Edwards. "That's negative for the dollar because ... the dollar needs higher real rates to essentially pull in the funding from the rest of the world".

The MSCI Emerging Market Index decreased 0.7 per cent to the lowest in more than a week.

The meeting also will provide the latest quarterly forecasts from all the Fed board members and regional bank presidents, which will include the key prediction of the number of rate hikes expected this year. The blue chip CSI 300 was up 0.8 per cent, but not far from an eight-month low hit in April.

Ahead of the statement, some investors were nervous the Fed might sound more hawkish on policy tightening after recent concerns about rising inflation.

2 percent target for some time, given that inflation has run below the target for six years.

The Fed predicts it will raise rates at least two more times this year.

Expectations of faster-than-expected rate rises in the US, as well as a rapid covering of positions by investors short on the dollar, has sent the greenback to its strongest level since mid-January.

The U.S. dollar bought 109.68 Japanese yen, lower than 109.80 Japanese yen of the previous session.

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